- SWFX market sentiment is 59% bearish
- Trader pending orders are 57% bearish
- Pair opened Friday's session at 1.0860
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Upcoming Events: US CPI; US Retail Sales; FOMC Member Evans's Speech; FOMC Member Harker's Speech
After finding support on Thursday, the EUR/USD currency exchange rate traded near the 1.0850 mark on Friday morning. However, various clues gave indication of the future direction of the currency exchange rate. In general, a short lived surge is quite possible, as the descending pattern has been broken.
The seasonally adjusted Producer Price Index for final demand rose more than expected in April, official data showed on Thursday. According to the Bureau of Labour Statistics, US producer prices rose 0.5% for the month of April, following the preceding month's 0.1% decline and surpassing analysts' expectations for a 0.2% hike. On a yearly basis, the Producer Price Index posted a gain of 2.5% in the reported month, the strongest increase since February 2012, compared to 2.3% registered in March. A 0.4% advance in prices for final demand services caused over 60% of the rise in the final demand PPI.
Watch More: Dukascopy TV
Upcoming events: US CPI and Retail Sales
During the Friday's Dukascopy research webinar the release of the US CPI and Retail Sales will be covered. The webinar is set to start at 12:00 GMT, and the data will be out at 12:30 GMT. In addition, for a more long term outlook of the strength of the US Dollar side traders would want to listen to the FOMC member speeches, which will take place later in the day. At 13:00 GMT FOMC Member Evans is set to give a speech, and at 16:30 GMT Harker will speak.
Read More: Fundamental Analysis
Euro finds support against Buck
After touching the 1.0840 mark on Thursday the EUR/USD currency exchange rate began a surge, which lasted into the morning hours of Friday's trading. On the daily chart it can be observed that the support for the rebound was provided by the 20-day SMA, which on Friday was already located at the 1.0855 level. Due to that it is highly possible that the currency exchange rate will once more move into the resistance put up by the weekly S1, which is located at the 1.0916 level.
Daily chart
The hourly chart shows that the previously active descending channel pattern has been broken. The surge, which occurred as a result of the bounce off from the 1.0840 mark, provided the needed force for the pair to break out. However, a larger surge is not occurring, as the 55-hour SMA is holding the Euro back. Moreover, the 100-hour SMA stands ready to do the same at 1.0890.Hourly chart
Read More: Technical Analysis
Market sentiment strongly bearish
SWFX traders have slightly decreased their bearish positions, as 59% of open positions are short on Friday, compared to 60% previously. Meanwhile, trader set up sell order proportion has decreased from 65% to 57%.
OANDA traders remain bearish, as 61.41% of trader open positions are short on Friday, compared to 59.42% previously. In addition, SAXO bank clients are also bearish, as 56.47% of open positions are short, compared to the 54.98% positions on Thursday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.10 in August
© Dukascopy Bank SATraders, who were questioned on their longer-term views on EUR/USD between April 12 and today expect, on average, the currency pair to trade around 1.10 in August. In general, 49% (-1%) of participants believe the exchange rate will be above 1.10 in ninety days, and 35% see it above 1.12. In the meantime, 2% of those surveyed reckon the pair will be at parity or below.